Visteon to Record Non-Cash Charge to Write-Down Deferred Tax Assets
September 09 2004 - 4:30PM
PR Newswire (US)
Visteon to Record Non-Cash Charge to Write-Down Deferred Tax Assets
DEARBORN, Mich., Sept. 9 /PRNewswire-FirstCall/ -- Visteon
Corporation (NYSE:VC) today announced that it would record a
non-cash charge to write- down its deferred tax assets in the third
quarter of 2004. The charge is currently estimated to be in the
range of $825 million to $900 million. The decision to record the
charge was reached following an analysis of the anticipated impact
of Ford's announcement of lower than expected North American
production estimates for fourth quarter and full year 2004. (Logo:
http://www.newscom.com/cgi-bin/prnh/20001201/DEF008LOGO ) As a
result of this analysis, and considering Visteon's losses in 2002
and 2003, the timing of when Visteon will be able to generate
sufficient taxable income in the United States and other affected
jurisdictions to utilize the company's deferred tax assets is now
unclear. In these circumstances, a write-down of Visteon's deferred
tax assets is required under accounting standards. This non-cash
write-down includes deferred tax assets as of the beginning of the
year and income tax benefits recorded during the first half of
2004, offset by a release of related tax reserves. In addition, as
a result of the write-down of deferred tax assets, Visteon will
cease recording income tax benefits against operating results in
the affected jurisdictions beginning July 1, 2004 and for the
foreseeable future. Although Visteon has made significant progress
in diversifying its sales base, declining production volumes on
vehicles on which Visteon has significant content continue to
adversely affect financial performance. "As the U.S. economy reacts
to the uncertainty of oil prices, interest rates and the job
market, it is difficult to clearly predict the impact of these
items on our customers. Given that difficulty, we recognize we need
to take aggressive actions to structure our business in the U.S. so
that we can be successful in an uncertain market," said Mike
Johnston, president and chief executive officer. "Our top priority
over the coming months will be to explore and pursue strategic and
structural changes to our business to achieve a sustainable and
competitive business. These changes will involve Ford and our
legacy businesses. While solutions are being pursued, we will not
diminish our focus on meeting our commitments to all our customers
for on-time delivery of quality parts." Visteon expects its
financial performance for the second half of 2004 and for the full
year will be significantly below previously forecasted results due
to the impact of lower than anticipated Ford North American volume,
the write-down of deferred tax assets, increased steel and fuel
costs, which Visteon has not been able to recover fully, and delays
in the benefits that were expected to be achieved from labor
strategies, such as flowbacks and plant-level operating agreements.
As a result of these factors, Visteon expects to evaluate
additional fixed assets for impairment, and may as a result of this
evaluation, be required to write-down certain assets in the second
half of 2004. Due to the uncertainty regarding this asset review,
as well as the uncertainty on the outcome of Ford discussions,
Visteon is withdrawing its prior guidance for third quarter and
full-year 2004 revenues, earnings and cash flows. Visteon is
scheduled to release its third quarter earnings on Thursday,
October 21, 2004. At that time, updates will be provided on other
company matters. Visteon Corporation is a leading full-service
supplier that delivers consumer-driven technology solutions to
automotive manufacturers worldwide and through multiple channels
within the global automotive aftermarket. Visteon has approximately
72,000 employees and a global delivery system of more than 200
technical, manufacturing, sales and service facilities located in
25 countries. This press release contains forward-looking
statements within the meaning of the Private Securities Reform Act
of 1995. Words such as "anticipate," "estimate," "expect,"
"projects," "outlook" and similar words and phrases signify
forward-looking statements. Forward-looking statements are not
guarantees of future results and conditions but rather are subject
to various factors, risks, and uncertainties which could cause our
results to differ materially from those expressed in these
forward-looking statements. These factors, risks and uncertainties
include the automotive vehicle production volumes and schedules of
our customers, unexpected developments arising from discussions
with Ford Motor Company and the related strategic cost structure
review, the effect of pension and other post-employment benefit
obligations, our ability to recover material surcharges from our
customers, the need to recognize restructuring, impairment and
other special items, our ability to reduce costs in accordance with
the company's plans, as well as those factors identified in our
filings with the Securities and Exchange Commission (including our
Annual Report on Form 10-K for the year-ended December 31, 2003).
We assume no obligation to update these forward-looking statements.
http://www.newscom.com/cgi-bin/prnh/20001201/DEF008LOGO DATASOURCE:
Visteon Corporation CONTACT: Media Inquiries: Kimberly A. Welch,
+1-313-755-3537, , Jim Fisher, +1-313-755-0635, , or Investor
Inquiries: Derek Fiebig, +1-313-755-3699, , all of Visteon
Corporation Web site: http://www.visteon.com/
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